Mumbai: Shares of Reliance Capital on Tuesday surged more than three percent on the bourses after the company said it is in talks for stake sale in its general insurance arm.

Reliance Capital group has begun talks to sell 26 percent equity in its general insurance arm to a foreign partner, and has said it is open to selling further stake in life insurance and mutual fund units.

Reacting to the development, shares of the company opened on a bullish note and surged 3.19 percent to an intra-day high of Rs 387.95 on the BSE. A similar movement was seen on the National Stock Exchange as well, where the stock of the company opened at Rs 383.10 and then rose to a day's high of Rs 387.90, higher by 3.15 percent. Market experts said the uptick in the counter is largely on the back of the stake sale report.

Reliance Capital CEO Sam Ghosh has said that the group is open to the idea of selling further stake in its life insurance unit, Reliance Life, as also in mutual funds arm, Reliance Capital Asset Management Company, at an appropriate time. Ghosh, however, did not disclose any names or potential deal size for Reliance General Insurance stake sale.

Currently, foreign investment is capped at 26 percent in the insurance business in India, but there are no such caps in the mutual funds segment. However, the government has proposed increasing the foreign investment limit in the insurance sector to 49 percent.